Effects of Supply Chain Disruptions on the Survival of Small and Medium Manufacturing Firms

1.1 Introduction

Supply chain disruption refers to any unexpected event or condition that interrupts the normal flow of goods, services, information, or finances within a supply chain, thereby affecting an organization's ability to produce and deliver products efficiently (Christopher, 2016). Such disruptions may arise from internal factors such as poor planning and operational inefficiencies, or external factors including infrastructure failure, market volatility, policy changes, insecurity, natural disasters, and global economic shocks. In the manufacturing sector, supply chain disruptions pose serious challenges because production processes depend heavily on the timely availability of raw materials, energy, labor, and distribution networks.

Small and medium manufacturing firms are widely recognized as vital drivers of economic growth, industrialization, and employment generation, especially in developing economies like Nigeria. In Nigeria, and particularly in Anambra State, small and medium manufacturing firms are prominent in sectors such as food and beverages, plastics, textiles, metal fabrication, and household goods (SMEDAN, 2021).

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the aim and objectives of the study. Others are significance of the study, scope of work, research hypothesis and questions, limitation of the study and definition of terms.

1.2 Background of Study

Supply chain systems form the backbone of manufacturing activities by ensuring the steady flow of raw materials, intermediate goods, and finished products from source to final consumers. According to Christopher (2016), an efficient supply chain enhances production continuity, cost efficiency, and competitive advantage, while disruptions within the chain threaten organizational stability. In recent years, global and local economic uncertainties have increased the frequency and severity of supply chain disruptions, thereby exposing manufacturing firms, especially small and medium enterprises, to heightened operational risks.

Small and medium manufacturing firms are widely acknowledged for their role in employment generation, industrial diversification, and economic development. SMEDAN (2021) reported that small and medium enterprises constitute a substantial proportion of Nigeria's industrial base and contribute significantly to national output and livelihoods. However, these firms often operate with limited capital, weak infrastructure support, and low technological capacity, which make them highly vulnerable to supply chain interruptions. Disruptions such as delays in raw material supply, fluctuating transportation costs, energy shortages, and market instability directly affect their production schedules and financial performance.

In the Nigerian context, supply chain disruptions are further aggravated by structural and environmental challenges. Adebayo and Ogunnaike (2019) asserted that poor road networks, inadequate logistics systems, policy inconsistencies, and dependence on imported inputs have continued to undermine the efficiency of manufacturing supply chains. These challenges increase lead times and operating costs, thereby reducing the ability of small and medium manufacturing firms to compete effectively and sustain operations over time. When such disruptions persist, firm survival becomes uncertain, particularly for enterprises with limited coping mechanisms.

At the global level, recent economic shocks have drawn attention to the importance of supply chain resilience. Ivanov and Dolgui (2020) stated that firms with fragile supply chain structures are more susceptible to disruptions that can escalate into long-term business failure. They affirmed that survival in a volatile environment depends largely on the ability of firms to anticipate, absorb, and recover from supply chain shocks. For small and medium manufacturing firms, the lack of diversified suppliers and weak collaboration across the supply chain often intensify the negative impact of disruptions.

Within Anambra State, small and medium manufacturing firms are actively involved in food processing, plastic production, metal works, textiles, and household goods manufacturing. Nwankwo and Kalu (2018) contend that these firms play a strategic role in local economic development but face persistent supply chain challenges arising from infrastructure deficits, insecurity, inflationary pressures, and inconsistent power supply. These factors disrupt the smooth flow of materials and goods, weaken operational efficiency, and threaten firm continuity. This study is set against the backdrop that this study seeks to examine the effects of supply chain disruptions on the survival of small and medium manufacturing firms in Anambra State.

1.3 Statement of Problems

Investigation revealed that the survival of small and medium manufacturing firms in Anambra State is increasingly threatened by persistent issues within the existing supply chain system. The current system is characterized by poor infrastructure, irregular power supply, inadequate transportation networks, and limited access to reliable suppliers. According to Adebayo and Ogunnaike (2019), firms operating within such fragile systems are highly vulnerable to disruptions that can escalate into financial losses and even business closure.

Additionally, the frequent interruption of supply chains is creating operational instability for small and medium manufacturing firms in Anambra State, leading to production delays, reduced capacity utilization, declining product quality, and loss of market competitiveness (Christopher, 2016; Ivanov & Dolgui, 2020).

Furthermore, many small and medium manufacturing firms in Anambra State have not fully integrated effective supply chain risk mitigation practices into their operations. Limited access to reliable suppliers, inadequate logistics planning, weak collaboration with supply chain partners, and poor adoption of technology are further compounding the negative effects of disruptions. It is against this backdrop that this study seeks to

1.4 Aim and Objectives of Study

The aim of this study is to investigate the effects of supply chain disruptions on the survival of small and medium manufacturing firms in Anambra State, Nigeria. In achieving this aim, the following specific objectives were laid out as follows:

1. To identify the types of supply chain disruptions affecting small and medium manufacturing firms in Anambra State.
2. To assess the impact of supply chain disruptions on the operational performance and survival of these firms.
3. To examine the strategies adopted by firms to manage and mitigate supply chain disruptions.
4. To evaluate the role of government and policy support in enhancing supply chain resilience.
5. To provide recommendations that will improve the survival and competitiveness of small and medium manufacturing firms.

1.5 Research Questions

Based on the objectives, the study will seek to answer the following research questions:

• What are the common supply chain disruptions affecting small and medium manufacturing firms in Anambra State?
• How do supply chain disruptions impact the operational performance and survival of these firms?
• What strategies are currently adopted by firms to manage supply chain disruptions?
• How does government policy support influence the resilience of small and medium manufacturing firms?
• What measures can be implemented to enhance the survival and competitiveness of small and medium manufacturing firms in Anambra State?

1.6 Research Hypothesis

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

• H₀1: Supply chain disruptions have no significant effect on the survival of small and medium manufacturing firms in Anambra State, Nigeria.
• H₀2: Supply chain disruptions significantly affect the operational performance of small and medium manufacturing firms in Anambra State.
• H₀3: Strategies adopted by firms to manage supply chain disruptions significantly influence their survival and continuity.
• H₀4: Government policy support significantly contributes to mitigating the effects of supply chain disruptions on firms.

1.7 Significance of Study

It is believed that at the completion of the study, the findings will provide actionable strategies to reduce the negative impact of supply chain disruptions and improve operational efficiency. Also, the findings will inform policymakers and regulatory agencies about the structural and environmental constraints that limit the effectiveness of small and medium manufacturing firms.

Furthermore, the research will guide the design of intervention programs that support small and medium manufacturing enterprises in managing supply chain challenges. In addition, this research will create awareness among stakeholders about the importance of supply chain resilience as a determinant of firm survival and competitiveness.

Lastly, the study will expand the body of knowledge on supply chain management and its effect on firm survival in developing economies.

1.8 Scope of Study

The scope of the research is focused on the effects of supply chain disruptions on the survival of small and medium manufacturing firms, using Anambra State, Nigeria as a case study. The study is limited to firms that are registered and operational within the state, providing a localized understanding of how disruptions affect survival and operational efficiency.

1.9 Limitations of the Study

During the course of this study, there were some problems encountered which stood as limitations to the research work. Some of the limitations include:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
3. Initial Cooperation Delay from Respondents: A particular limitation of this work came as a result of the respondent refusal to offer their cooperation at the initial time they were contacted. This contributed in making the success of this research study difficult.

1.10 Definition of Terms

Supply Chain Disruption: This is any unexpected event that interrupts the normal flow of goods, services, or information in a supply chain, leading to delays, increased costs, or operational inefficiency (Christopher, 2016).

Small and Medium Manufacturing Firms (SMMFs): These are enterprises engaged in production or processing activities with a defined number of employees and limited capital investment, contributing to economic development and job creation (SMEDAN, 2021).

Firm Survival: This refers to the ability of a business to maintain operations, remain financially viable, adapt to environmental changes, and continue competing in the market over time (Ivanov & Dolgui, 2020).

Resilience: This is the capacity of a firm to anticipate, absorb, and recover from supply chain disruptions while maintaining continuous operations (Sheffi, 2015).

Operational Performance: This is the efficiency and effectiveness with which a firm utilizes its resources to achieve production goals, meet customer demands, and maintain competitive advantage (Adebayo & Ogunnaike, 2019).